In America, the political right seems perpetually mystified by the political left. Republican luminaries view Democrats as they wish them to be rather than how they are. Their confusion is self-imposed as they refuse to acknowledge our adversaries’ bad faith. Despite our president making clear on the campaign trail that his goal was “fundamentally transforming the United States of America,” many conservatives mistook hope for truth. They presupposed Barack Obama would govern as a moderate. They were very wrong. Even dubbing Mr. Obama the second coming of Jimmy Carter is wishful thinking.

The neo-socialists currently in charge of both the legislative and executive branches of government embrace collective salvation and regard the creation of an omnipresent Leviathan as utopia.

With so many fragile egos and infantile desires vested in Barack Obama’s malignant uber-statism, it is not surprising that the left’s leaders have no qualms about squashing and silencing any individual who jeopardizes their version of “progress.”

Rep. Weiner’s motivations are comically transparent. Gold is the nemesis of leftists everywhere. It is the best example of the canary in the coalmine when it comes to the economy. Its surge in value illustrates the futility of the federal government accumulating debt along with the public sector’s takeover of private industry.

Government Housing Inc. is dumping their booty for far less than what it is worth and we are on pace for 1,000,000 foreclosures this year. The Federal Reserve has printed money en masse which is precisely why gold and other commodities skyrocketed in worth since the financial debacle began.

Lots of people are unaware of this reality due to the duplicity of the Democrats and the independent contractors who advocate for them within the mainstream media.

Like the rest of his ilk, Rep. Weiner understands that gold’s amazing advance by itself is convincing proof of government mismanagement. This makes the metal his foe. His response is to attack those who sell it. Gold retail outlets conspicuously sponsor conservative VIPs on radio and television which makes them attractive targets.

To leftist control freaks, a company’s refusal to adhere to their will provokes and infuriates. That some corporations have the nerve to pretend that their purpose is to make a profit rather than assist the Democrats with social engineering schemes exasperates further.

I have nothing against owning gold and silver, but I am also a firm believer in owning those other important metals: brass and lead. If the economy, God forbid, would collapse, b&l would play an important role in keeping what you have, as well as protecting your family and loved ones. I would think it wise to stock up on say, .22 and 9mm shells as trading items- the new “coin of the realm” as it were. . . It goes without saying that a delivery system for said “coin” is also desirable. Maybe add .38, .357, and .40 to the mix. Thoughts, anyone?

Which is why I just bought 500 more hollow point rounds for my guns. I also have a couple of thousand FMJ rounds for target practice, but they can also be used to kill animals (both the 4- and 2-legged type) if needed. In a true collapse, bullets can also be used for barter.

Fortunately there’s a great Web site that scours the Internet for the lowest ammo prices. Interestingly, prices have come down a bit lately.

Perhaps the stock market is going up because it knows that the Republicans will be swept into power on November 2nd. What concerns me is that both the stock market AND precious metals like gold are going way up and it’s not usual that both do so at the same time. One or the other is going to collapse, and it’s probably going to be the stock market. Something big is coming our way and it doesn’t look good. The Federal Reserve is meeting in early November and that may set the stage for what’s about to happen, a collapse of the dollar as we know it. If that does happen, gold is going to be one of the few things left of any value. I’m betting people like Weiner are banking on the market being the one to survive. Anthony, if I were you I wouldn’t bet on it. If the Federal government doesn’t get a grip on its massive deficit and spending, the market will collapse along with the dollar and then Weiner can explain to the American public what went wrong. Oh, and Anthony, you can’t blame this on Bush anymore. Your pal Obama owns this Armageddon that’s headed our way.

Paying dividends in what…more worthless FRNs? Pay mine in Canadian Maple Leafs then I’ll be impressed, otherwise it’s just a losing race of my investments vs. a Federal Reserve hell-bent on currency devaluation.

Gold is merely a hedge against fiat currency malfeasance. A store of wealth.

One day it will return to its proper function as a universal medium of exchange. It also has the added bonus of stopping, or at least slowing the attempts of politicians to finance their wars, bread, and circuses with debt denoted by worthless pieces of paper.

Listening to Weiner is like being stuck on a nine-hour flight with three-dozen spoiled, angry, whining, screaming, tantrum-throwing two-year-olds. His tone of voice and his logic are both at a comparable level.

Ah the lure of Midas! The ancient and irrational focus on a metal as a sign of something very special… very precious… my precious…

Look, unless we recede into a Mercantile economy (Sharia financing anybody?) Gold is no more a sign of anything than anything else. Gold = Beanie Babies. It is worth what it is worth because people desire it in volumes exceeding its availablilty.

That is it. You can’t eat it. You can’t turn it into useful tools. If you can’t get rid of it, it is basically wasted money. That is the rub.

For gold to have any value there must be a market of non-gold things available for exchange. Since as previously mentioned, you cannot eat gold, you have to find some way of trading gold for food, or the tools to grow food. Since you can’t make gas, the same limits apply. Since not one retail operation will take your little sliver of the stuff… weigh it.. and take your word that it is 24carat… and then has somewhere to exchange it for something more valuable… The “gold” economy is merely a commodity exchange within the non-gold cash economy.

The point is that gold is more worshiped than “valued”. It’s real intrinsic value is probably slightly less than copper or even zinc. It makes wonderful electrical contact material. It serves well for dental work since it is dense, malleable, and non-reactive/hypo-allergenic as long as it isn’t alloyed with metals that are. It makes lovely jewelery, and serves as an excellent anti-radiation coating for spacecraft.

This afternoon, the Federal government could go right back to the pre 1970′s policy of limiting the personal ownership of gold to some small amount of non-bullion items, set the official surrender rate at some “official” number, and then order it confiscated, and the gold market in this nation shut down.

Funny, that’s how I always thought that the Feds would eventually solve the debt and deficit problem. They’d just outlaw the gold market, confiscate the gold at the intrinsic market value, and sell it off to the Mercantile Economy.

Gold isn’t the answer. It’s a demon that man has worshiped before history was ever recorded. It’s value is small, but its allure is stunning and stultifying. Our only wealth is the next generation, and the generation after that. That is where we should be “investing” and growing the economy, not coveting “The Precious”.

John,
All commodities need a means of storage, so they can be used when you need them and not before. Gold is merely a reliable storage of wealth. You deride gold by comparing it to Beanie Babies, but the irony is that you can’t make gold, but you can make all the Beanie Babies you want. Similarly the Fed can print all of the dollars it wants. That is why the value of gold has remained relatively constant over centuries. On the other hand, the dollar and Beanie Babies will continue to trend towards their intrinsic value of zero.
Of course there has to be a market of things available for exchange. Since it is impossible for everybody to be self sufficient in all things, there will always be markets. Then you have a choice of strictly barter, or an agreed upon medium of exchange. In such a circumstance, and you think of a better one than the time-tested use of gold?
Confiscating gold may be attractive to the greedy hands of government, but it is a drop in the bucket when it comes to reducing govt. debt. When FDR did it, we were on the gold standard and nearly everybody had a gold coin or it’s paper equivalent in his pocket. Taking the gold, then immediately devaluing the dollar against it, was a great way to confiscate wealth. To have the same impact today, gold would have to have the same value relative to the number of dollars in circulation as it did back then. Given that the number of dollars in circulation has exploded by thousands of percent, some have calculated that gold would have to be on the order of $35,000/ounce. Sounds crazy, but there is no denying that your dollars are a mere shadow of what they once were.
Investing and growing the future are noble ideals. But such things require capital and means of storing it. I assume you desire to save for the next generation’s college funds, etc? That requires wealth that can be stored, and Beanie Babies aren’t going to cut it. Please don’t confuse the pragmatic storage of wealth for a time when it can best be used with “coveting”

1. You need something of worth to store, and that something of worth will have to be something of value TO somebody in the future. Let us say you are sitting on 100 troy oz. of gold bullion, and the economy completely collapses. You live in a house in the suburbs, you might be able to lop off an ounce and find someone to trade that ounce for say a bag of flour and some wood for the fireplace… oops you don’t have a fireplace… it’s gas… oops the gas company doesn’t take gold… and the “gold exchanges” don’t have anything convertible to exchange with you. Your pipes freeze and flood your basement but the water company has gone out of business so now there is no water… you go to the water company with your chunk of gold and there is no one to trade with it’s out of business. So… you have lots of stored wealth… a house without power or water, and a 100 troy ounces of a metal that makes nice bling.

My point is that if the economy, which is not based on gold exchange, is no longer functioning, your gold is worthless. It’s beanie babies…little shaped bags of beans that once were greatly coveted, and people bought as investments… like any other economic balloon.

2) If the government does what I suspect that it is going to do, which is pop the gold bubble by banning its ownership and confiscating all but a small portion of it (Constitutionally.. with a nice crisp savings bond from the Feds for every ounce you turn over… ) gold will have turned out to be GM stock.

Maybe the story of Moses, the Commandments, and the Golden Calf (Baal – the ancient god of Canaan and Phonecia) was a warning far beyond the First Commandment?

If this were a pre-20th century, Mercantilism dictates that it is indeed a storing mechanism for wealth because it is instantly convertible. It is no longer so. Only a return to a Mercantile economy will make it so.

You can’t buy a week’s worth of groceries with gold. You can’t buy a home with it. You must convert it to that which you are so put off by, the currency of the economy, if that economy will allow it.

As has been pointed out before, gold has been a really average to poor long term investment. I fully expect the bubble to pop, just like tulips, .Com Stocks, and Real Estate.

The old miser needed a can of beef stew. He went to the store. He picked out his stew, and put can on the counter. The clerk’s laser scanner clicked, the computer beeped. The clerk said “that will be $2.58″.

The old man pulled a small chunk of gold out of his pocket and handed it to the clerk. “It’s gold and please give me the change.”

The clerk said…”Old man, it’s a rock, come back when you have real money.”

— I know.. too simple.. too unsophisticated… but so is this gold bug fad.

Gold is of little use after a government collapses — basically because there’s nothing to prevent thugs from stealing it except your own ability to hide it — but it’s a great way to preserve wealth in secret until order is restored. (What, you thought no new government is likely to arise after the old one falls?) Ask any European (or the children of any European) who lived through the aftermath of WWII.

My point is that if the economy, which is not based on gold exchange, is no longer functioning, your gold is worthless.

Gold is not what you store for *that* scenario. Lead, brass and Tenifer’ed steel in certain configurations is what you need for *that* scenario. Gold is what you would need for after the dust settles and it’s time to start rebuilding.

2) If the government does what I suspect that it is going to do, which is pop the gold bubble by banning its ownership and confiscating all but a small portion of it (Constitutionally.. with a nice crisp savings bond from the Feds for every ounce you turn over… ) gold will have turned out to be GM stock.<

If gold has no value, as you insist, then why would the government care to do that? What do they know that you don't? Besides, in the current climate, should they try that — see above.

You can’t buy a week’s worth of groceries with gold. You can’t buy a home with it. You must convert it to that which you are so put off by, the currency of the economy, if that economy will allow it.

We were discussing a post-dollar-crash scenario. Now you’re suddenly switching contexts and talking pre-crash? Even with that switcheroo, you are spouting nonsense. If the dollar gets wiped out, people will be searching for an alternative damn fast. Gold retains all the objective attributes that made it a good choice for money in the past: fungibility, durability, divisibility, difficulty of counterfeiting, and high value density. While the mainstream economy isn’t set up to handle gold, they could move to it with some effort — small businesses faster than large, and individuals can do it on a (silver) dime. Some already have.

The post-dollar currency need not be gold, it could be any other item or commodity of value — but gold is objectively and historically one of the best choices.

1. My point was pretty simple. Modern society is far past the age of gold as a marker of much of anything. Unless you are a survivalist, hording for the anticipated apocalypse the gold economy is gone.

2. The example of someone going out and purchasing all the silver alloy coins that they could buy is sort of sad. A quarter is a quarter. A partial silver quarter from 1964 is worth $.25, which is what its exchange value is today. If we get to a point where we are chopping up Spanish Silver Dollars into eight pieces and paying for things in bits, I rather suspect that whoever is left over is going to be too busy figuring out how to build shelter, keep warm, and feed themselves.

3. I spout zero nonsense. Wealth is not a THING. Gold is merely an agreed upon marker of a strong of societies. If the dollar collapses as you suggest, you are merely assuming that gold will bear some weight in trade. Since your suggestion means that the entire monetary system of most of the world will have collapsed as well, having gold as a marker of wealth might very well be the least of your problems. Wealth might be more aptly measured in you having invested in “Amish Lessons”, access to a well, land that you can defend, ammunition, SALT… etc. If we fall that far, who really cares at that point?

So, buy all the gold you want, get suckered by brokers making huge money off the exchanges… and realize that you have a nice pile metal that at the end of the year could be worth $300 an ounce.

BTW – A rhetorical question for someone out there. Since catastrophic economic collapses often follow irrational inflationary bubbles, as has been recently demonstrated by the real estate mess; why oh why would the federal government be interested in deflating the precious metals bubble before it consumes millions in people’s savings?

Just wondering…

Gold is not the answer. Gold is not a salvation. Gold is an element. Its symbol is Au and is positioned between Platinum (Pt) and Mercury (Hg), its atomic weight is 79 and that is all it really is. It’s value is subject to the demand for it, and the demand for it. That demand has been problematic throughout human history.

For those who think that the Feds cannot ban the private ownership of large amounts of bullion gold, and even gold coins, think again. It has been done, and found perfectly Constitutional. It can, and I rather suspect will, be handled that way again in the future.

Wampum is what man wants it to be. I a collapsed economy a good team of draft horses, a plow and lessons on how to use it might be more valuable.

I wouldn’t call 5,000 years of history of gold as money a fad. But your point of having something worth buying does have merit, unless people are willing to go full survivalist and lock the gate, grow their own food, etc. In Cambodia at the peak of the Khmer Rouge, two tins of tuna went for an ounce of gold.

At some point, things will get better and someone will want a little gold or silver and you’ll get more than a couple tins of tuna.

You say that gold will be worthless. That is the reason why my friends in the 70s bough up all the real silver quarters and dimes. They have them stored in safe places to pay for smaller items. Gold will pay for larger items. They call it Gresham’s Law.

You’re missing the point of “storage of wealth”. Here is a simple example:

In 2010, you go buy a can of stew for $2.58. Instead of buying 100 cans of stew, I go buy 1/5 oz of gold for $258.00

In 2015, after a few years of inflation, you take your $2.58 to the store and ask the clerk for a can of stew. He asks you for $10.32, and you buy a piece of gum instead. I sell my 1/5 oz at a pawn shop for $1032.00, go to the store and can still buy 100 cans of stew.

It doesn’t have to be gold, you could use any commodity that is durable, easy to transport and easy to sell. However, there aren’t that many items that meet those requirements, and gold has a proven track record.

If you don’t anticipate any inflation, and think the dollar will maintain its current buying power forever, don’t buy gold. Some people think that when the goverment starts buying its own debt and propping up the stock market with printed dollars, the value of those dollars might take a hit.

“Funny, that’s how I always thought that the Feds would eventually solve the debt and deficit problem. They’d just outlaw the gold market, confiscate the gold at the intrinsic market value, and sell it off to the Mercantile Economy.”

In the 70s when owning gold was still illegal, many people I knew had gold in Swiss banks. It got to the point that the Swiss were charging negative interest on the deposits. The government will not be able to control investments in gold like they did in 1933.

Nothing has absolute value. Nothing at all. Anything you want to use to store wealth is going to require someone will want to exchange what they have for what you have. Silver and gold are /usually/ acceptable, with some exceptions right after a big disaster. Do you want to store rice and beans? Rice goes rancid after a year or two and beans get progressively harder to cook. Gasoline? The quality drops after about 6 months (though some old motors will still burn it at 2 years or more). Firewood? Can be made illegal to burn. Charcoal? Same. Gemstones? For suckers (they retail at about 10X their sale price when you need the money).

If store owners do not want to accept gold, several people will set themselves up as money changers and banks will change the gold. I saw this happen back in the 80′s.

And homes were a great way to invest too. I mean after all, you can live in a house (until they foreclose).

I kind of gave up listening to the “experts” a few years back and decided to do something new. I just kind of follow where the big boys are hedging their bets – and right now, that ain’t placing their money in American currency.

Where do you get all of this misinformation and plain irrationality? Sometimes I am just left speechless by ignorance that pervades these blogs. Have you ever done ANY research on this subject..study any history, or taken an economics course? Good, don’t buy any gold..more for the rest of us.

In 1980, the last year of the Carter administration, gold’s average price was $612.56 (London – http://www.kitco.com). You remember Jimmy Carter, the President we didn’t anyone could be worse than? (until now). After Carter, the country woke up, elected Ronald Reagan and prospered for many a year.

From 1980 to 2009, the annual US inflation rate averaged 3.36% (http://www.measuringworth.com/calculators). Applying this rate over that time yields a result that the value of a dollar has inflated by a factor of 2.70 over that period. Ergo, if the price of gold had simply kept up with inflation, it should be worth $1,653.91 today. Yesterday’s gold quote was $1,345.00 (http://monex.com). If you had purchased gold in 1980, you would have lost money on the investment. The only people who make money on gold are dealers & speculators. The average investor is going to get creamed.

You want to make an investment that will pay dividends? Vote out the incumbents on November 2. We could use another Reagan.

Your argument certainly holds true for anyone buying gold at commodity-bubble inflated prices like we saw in 1980 or we see today. However, if you gold-hedged in the 2000 time-frame when you could have picked up an ounce for $250 (and dot-coms were starting to fall from the stratosphere) you would have increased your investment over 5-fold in a decade. Of course, a contrarian investment strategy like this requires lots and lots of patience and a strong aversion to herd mentality; something that has always been in short supply.

The point of holding gold is not to make money. Rather it is way to safely store wealth in a way that has remained relatively constant over centuries. Cherry-picking peaks and valleys proves little, other than the fact that the unlucky gold buyer lost only a portion of his wealth, and not all of it in some dot com collapse. In any event, gold may pass the $1600 mark soon enough.
Also, do you really believe the 3.36% inflation rate? That is derived from govt. statistics, and they readily admit to “cheating”, by for example, substituting hamburger for more expensive steak because they have equivalent nutritional value. Similarly, the Dow “cheats” as well, by periodically dropping underperforming or failing companies for more successful ones.
The bottom line is that you can’t “cheat” with gold. While there are government alchemists who can dabble in dollars or General Motors, they can no more create gold than their Medieval counterparts.

Gold and silver are many things. Real money, an investment, a hedge, insurance, and so on. They are also a great way to make money, and nothing wrong with that. You like profits? Buy precious metals mining stocks while they are dirt cheap. The great secret is that real gold and silver are very scarce while paper derivatives dominate trading. We are not on the ground floor of the PMs’ bull market, we are in the sub basement at the bottom of the parking garage.

About that- as a nuclear engineer I resent the remarks about alchemy. And the fact is that it is possible to transmute mercury into gold (although doing so will almost certainly cost more than the gold is worth at current energy prices).

That is one of the lamest arguments I’ve ever heard. Sure it’s easy to cherry-pick the period over which to measure return to make the case you want.

Meanwhile, I bought two ounces (my entire gold “portfolio”) in June and August, 2009 at average price of $955, so it looks like I’ve gained almost 50% in little more than a year. That sure is a hell of a lot better than any other investment I’ve made lately.

http://www.freerepublic.com/focus/news/2158115/posts
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: ‘Account overdrawn.’

The more the Left persecutes Beck the richer he gets. The truth is the Left hates anyone having power but themselves even though they have to lie and cheat to get it. Like their Islamic brothers they depend upon us to have blood they can suck. Since they cannot create anything worth sucking on themselves, they must take it from us. We all need to cut off their supply now.

It’s not gold that’s the problem. It’s the gold hawkers. Heard a story the other day about a guy who bought $140K worth of gold from Goldline. He decided he made the wrong move and wanted to sell the gold back to Goldline. They agreed to buy it . . . for $80K because, “That is what it’s worth.”

I have read about this complaint before. I’ve purchased gold coins but only at a flat transaction fee over spot price. This guy was conned and/or was stupid enough not to realize that when investing in gold or silver the real value is the intrinsic value of the metal itself…not the pretty coin. Years ago companies you to have 1 oz pure silver bars produced with their company logo on them. These were give away items to employees and customers when silver was less than $5/oz. I bought a bunch of them a few years ago when silver was < $5/oz put 'em away and almost forgot about them. Today they're worth over 3 times what I paid for them and they have appreciated much faster than my gold investments.

Wow, that’s willful ignorance on a galactic level. Here’s one equally absurd: If I bought a Z28 brand new in 1968 for $6,000 and I drove 3 miles a week for the last 40 years, washing it every Saturday and keeping in the garage, should I sell it for $6,000?

Try to say in the present. It’s scary for the uninitiated, but trust me, you’ll get used to it.

Stop spreading ridiculous lies, distortion and rumors! Goldline’s spread is around 3 percent not 40 percent. The value is based on current bid prices which are higher than spot prices and usually about 3 percent less. Pick up a book or go out to the internet and educate yourself rather than relying on ridiculous hearsay.

Dr. Dave said it right: “This guy was conned and/or was stupid enough not to realize that when investing in gold or silver the real value is the intrinsic value of the metal itself…not the pretty coin.”

That’s what Goldline does: they pretend you are investing in gold, while you are actually investing in gold coin. Gold has to essentially double in price for Goldline customers to bread even when they want to sell their coins.

But if you actually look at the substance of the argument then it is so much harder to write a nice little two-page screed about the “unhinged left”.

If you have the liquidity, gold bullion is the way to go. You just find a seller that charges spot plus a flat commission or transaction fee. Some coins have an inherent value greater than the metal itself, but then you’re not really investing in metals, you’re investing in coins. That’s the deception. I bought 1/4 oz Canadian Gold Maple leafs, but I only paid a modest transaction fee + spot price. Some of the European gold coins sell for more than they’re worth in gold and this is not an investment for me.

Keep in mind that in the event of total chaos and societal meltdown, a loaded gun is worth its weight in gold.

Gold coins have the added value of being recognizable and having an agreed value. I agree that premiums on gold coins may be too high but a small premium is probably worth it. Gold bullion is great for large sums but it may not be very easy to sell.

That is exactly the point: Goldline does not deal in gold– they deal in gold coins. And they simply overcharge people on the price of the coin. Remember this: “It’s not gold that’s the problem. It’s the gold hawkers. Heard a story the other day about a guy who bought $140K worth of gold from Goldline. He decided he made the wrong move and wanted to sell the gold back to Goldline. They agreed to buy it . . . for $80K because, “That is what it’s worth.””

So Goldline essentially took in a fee (or overcharged on the price of a gold coin) by about 75%. That’s the scam. And this scam is being perpetuated by the people like the person who wrote this original article– insinuating that Goldline is a gold trader when in actual fact it’s a goldcoin trader.

Again, has anybody (e.g. Rep. Weiner) made an argument against purchasing gold? I bet not. The argument is specifically against Goldline and the people who promote Goldline as a great way to purchase gold.

As long as the purchaser knows what the intrinsic value of a metal is and purchases based on that figure, he is getting a good deal. Gold and silver and platinum have always been special, be it as jewelry or foundation for a currency. Metals are finite, dollars are not!! As for numismatics, one must be educated in that field before purchasing…numismatic value is NOT the same as metal value…it is based on scarcity and age, condition, amount coined, etc. As a measure of wealth, it sure beats paper currency!!!

Actually, platinum has only been prized recently due to its value as a catalyst. Time was Spain dumped a whole bunch of platinum into the sea because people were using it to counterfeit gold coins (it’s very difficult to tell the difference between a gold coin and a gold-plated platinum coin because they’re about the same weight).

Hrun: yup, as a long time listener to talk radio, it’s really embarrassing that so many stations play those ads.

They’re technically doing everything legitimately, but for the naive consumer, it’s a scam. The problem is that they’re not buying real gold, they’re buying “collectables” that are marked up significantly.

You always tend to have to pay money for financial transactions. You have to pay a broker to buy or sell stocks, you pay interest on loans, the bank charges fees to use your money, etc. So you’d expect that if you want to stash your money in gold to insure it against economic collapse, you’re going to pay some fees.

But with coins you’re basically losing on the order of 50% of your wealth when you store it. That’s pretty outrageous.

Now, is it more embarrassing that all the radio stations play ads for a deceptive company like Goldline, that Beck aggressively promotes Goldline as a way to purchase gold (rather than speculate with collectible coins) or that a person like Bernard Chapin is writing a whole article that simply perpetuates this misconception?

See, you’re taking the same approach to this as Weiner, which ends up stirring the pot rather than fixing anything.

None of these guys, Beck, Chapin or talk radio hosts, are trained investors. Maybe they should know better, but there’s no conspiracy here. I don’t know why people think that since Glenn Beck is a expert on politics that he would be an expert on commodities any more than why Johnny Depp being an expert actor must be an expert on whatever he might be blabbing about. But they do, and make poor decisions about it all the time.

Those who think that gold has “no intrinsic value”, apparently have never paid much attention to what’s inside their computers. The vast majority of pins, critical circuit trace & contacts is generally plated with the metal that does not oxidize. But, when was the last time they relied on a mere computer, cellphone or other critical electronic device for anything like keeping the lights on & the water on & gas pumping? But what do facts have to do with it? nah.

As a matter of fact Gold and Silver cannot act as “true money” because of legal tender laws. They can only act as a store of value, which is just one reason for the value of money. If it were not for legal tender (and other laws) then both would be much more valuable as they could and would be used as money. Currently you cannot go into a store, drop a gold coin on the counter and buy something.

The reason why Gold and Silver are doing so well right now is because many other goods used as a store of value are and were overpriced, and are falling in value, and increasing in risk. It’s not because of their use as a alternate money.

If you understood money then you would understand that it isn’t about barter, but a common unit of account (a most marketable commodity that eliminates the need for barter). They example you are using to show that gold is used as money could in the same sense be used to prove that chicken eggs are money. After all they accept chicken eggs for payment in barter clubs also.

What you are claiming is totally at odds with what the great Austrian economists have taught. Gold is only money sans any government interference. Government does have the power to disrupt markets, even the market that determines what commodity is money.

Would you at least recognize that gold could absolutely not serve the purpose of money after Roosevelt made private holdings illegal and before it was relegalized? Can you at least see that. If not then I would say you are a gold bug, and this from a guy who holds lots of gold and silver since early in the millennium.

If conditions are right gold will fall again. I’m not predicting it now but if it again becomes less useful as a store of value then it will fall (and it’s money use will have no effect). Then again if there is a resurgence made possible in it’s use as money (via law) then it will go up.

I would rather have 10% inflation than 1% deflation. DEFLATION is destructive, it destroys businesses, people lose their jobs, can’t pay their mortgage and lose their homes, and this depresses the Real Estate market. Isn’t this what is happening right now?

Supply and Demand is such a simple concept but how difficult to understand. If the supply of a commodity shrinks, while demand remains the same, the value of the commodity will rise to balance the demand against the supply. The M3 money supply (which includes mortgages, but which the Fed stopped calculating in Oct. 06 “convenient timing huh?”) is shrinking at a 6% yearly rate at the moment, according to http://www.shadowstats.com. At the same time the demand for money is rising as evidenced by the hoarding of money by banks, businesses, and individuals, therefore the Dollar is appreciating in value, this is DEFLATION. No matter what the very narrow measure of inflation CPI says, 60% of American family net worth is held as equity in their home, and with home prices crashing, the Dollar is appreciating in value vs. the Real Estate market (the CPI doesn’t measure the 1,000,000 homes foreclosed on this year, that’s 1,000,000 families that went broke).

$4 trillion in US treasuries are held by foreigners. I believe we should cash in our chips, which we earned by allowing foreign nations and people to manipulate their currencies, by having the Fed pay all of these treasuries off (it would only take an accounting change in the Fed computers as there isn’t any paper involved). This would kill several birds with one stone. It would increase the money supply, maybe enough to get us out of this destructive deflation. It would increase exports as foreigners purchase US products and services. It would increase foreign investment as foreign dollars seek returns in US equity, bond, and real estate markets. And finally it would force US hoarders off of their piles of money, as the Dollar stopped appreciating and began inflating again.

Both are destructive, and both are positive feedback loops. Inflation rewards indebtedness and punishes thrift, destroying capital. Deflation rewards hoarding and punishes risk taking, destroying income. However, less than 1% a year in either direction should be tolerable.

Deflation is not destructive and you have no idea what you are talking about. Which kind of deflation? You mean like the way the price of computer disk space has gone down? That is beneficial. Do you mean fractional reserve deflation? Well that is beneficial also.

The following is a quote from leftwing hero John Maynard Keynes (who actually repudiated – they didn’t have refudiation yet – most of what liberals love about him), paraphrasing leftwing hero Lenin on inflation as a weapon to bring down the capitalist system. Democrats may not know the quote, but I know they share the point of view. It is from Keynes’s 1919 book The Economic Consequences of the Peace (he was against the onerous reparations imposed on Germany by the Treaty of Versailles after World War I):

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

You are missing the point: These gold trading companies do not care about how the price of gold develops. They simply buy whatever gold they are offered and sell whatever they are offered. On each transaction they take a fee over the current price of gold. The fee is what they live on.

It is very similar to stock brokers: They get rich no matter if you stock rises or falls. They make money on the transaction fee in the process of buying and selling the stock.

“In America, the political right seems perpetually mystified by the political left. Republican luminaries view Democrats as they wish them to be rather than how they are. Their confusion is self-imposed as they refuse to acknowledge our adversaries’ bad faith.”

I have always told people who earnestly rebut liberal talking points to never take the argument of a liberal at face value.

they dims have their eyes on our gold. I have purchased some, none of it on paper, and none of it is stored where they can get their hands on it. prior to the communist anc takeover in south africa exchange students smuggled krugerrands, and gems out of the country and brought it to USA for safekeeping. back then it was safe in a bank lock box, i fear that it is not today. if ya’ got it hide it . .. . . they want it!

I’m reminded of a passage from the Epistle of James, warning against hoarding gold and silver these days. “Weep and mourn you rich, for your silver is cankered and your gold is corroded.” It talks of people hoarding gold and silver only to throw it out into the streets and call it worthless when the time comes that they were planning to use it for.

Look up Zimbabwe on You Tube to see what gold is worth after an economic collapse. All transactions are done with US dollars or other hard currencies (Zimbabwe money is worthless), OR gold if you have no foreirn currency. The poorest people dig for gold all day at the rivers to buy a loaf of bread to survive on. The cost of the bread in US dollars is about $3.50, a reasonable price. Each person who wishes to survive must mine close to a tenth of a gram of gold per day. There will generally be a black market for needed goods, and the most desireable barter instrument will be gold. Gold is for survival, not investing. Silver is also a good barter instrument. How much was a gallon of gas in 1964? I recall it was about $0.25, so a quarter could buy a gallon of gas. That same SILVER quarter today is worth between 5 and 7 dollars, so you can buy maybe 2 gallons of gas with it. Some local stores where I live will accept gold and silver at the spot market value for sales.
There are cases where precious metals are of no help. When Krakatoa erupted, the local monarch had some of his children starve to death, as there was no food to be had at any price. That is why you don’t trust any one item for survival, you need food, medicine, clothing, water, shelter, guns and gold to have a good chance at living through a collapse.

I’m hardly a financial expert, judging from my perpetually stressed economic condition… but it looks to me like gold has got a schizoid character to it as an investment. As long as the economy holds together, gold is a great investment in the (perhaps justifiably) paranoid environment we’ve got now.

But during a complete economic collapse, it may be very difficult to redeem a horde of gold – other commodities such as luxury items, tobacco, coffee, ammunition, etc. may become much more desirable under those circumstances.